DirecTV and AT&T Cable Merger Under Fire


by Douglas Hufnagel

The merger between DirecTV and AT&T was opened up to further Congressional questioning. The Senators did not ask easy questions of the companies, and seemed clearly wary of trusting either corporation (especially AT&T’s chief executive, after they felt that a previous deal did not work out according to plan).

Senator Blumenthal of Conneticut was particularly concerned whether this would result in price decreases for customers, which the chief executives of course would not commit to, while citing lowering costs for both companies as a major motivation of the attempted merger. The senator was not impressed with the corporation’s attempt to weasel out of the question, saying “I have this sense that we are watching a re-run here…A lot of consumers would find that unsatisfying.”

Senator Al Franken of Minnesota remembers the deal that turned the Senate sour on AT&T big merger plans. He told the chief executive of AT&T, Randall Stephenson, about a merger plan with Bell South in 2006, after which “you hid the [promised] plan deep in the terms and conditions in your web page…. it sounds like a broken promise.”

During the exchange, AT&T pledged to support a standalone broadband service at competitive prices, a pledge that would likely be easily broken or regulated away after a merger occurred. There is no sign that this deal would help consumers in any way, although that is of course not the only thing at stake. It is a serious business whenever Congress or a regulatory agency makes a decision to take private business owner’s options away from them by violating basic property rights. In any event, the deal has not been approved or declined yet, and we will have to wait and see what happens.

[Photo via Getty Images[

Paul Tassi In addition to writing for TVOvermind, Paul has contributed to major publications such as Forbes. He's a video game expert as well as TV and Movie guy.
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